Hogan Administration, Centers for Medicare & Medicaid Services Announce Extension of Maryland’s All-Payer Hospital Model

January 10, 2018

Federal Government Agrees to Extension of Maryland Hospital Model Contract

Governor Larry Hogan, together with the Maryland Department of Health and the federal Centers for Medicare & Medicaid Services (CMS), announced on January 8, 2018 an extension of Maryland’s All-Payer Hospital Model Contract. The federal government has agreed to approve a one-year extension to allow it to complete its review and to consider additional data through the end of 2017 before finalizing the contract for the new Maryland Total Cost of Care All-Payer Medicare Model (Maryland Model), the draft terms of which were announced in August 2017.

As a result of this agreement, Maryland’s current All-Payer Hospital Model Contract and amendments will be extended from an expiration date of December 31, 2018 to December 31, 2019. The one-year extension was mutually agreed upon by the state and CMS and will not affect existing contractual terms, and it will ensure continuity for Maryland patients and providers.

“This is a significant win for Maryland’s health care delivery system, and the direct result of the tireless advocacy on behalf of all Marylanders by Secretary Dennis Schrader and his team,” said Governor Hogan. “Our administration is committed to working with our federal partners to ensure we continue to lead the nation when it comes to innovation in health care access and affordability for our citizens.”

“This extension reflects the Hogan administration’s continual commitment to improving health care quality while reducing costs. We look forward to working with CMS to finalize the new Maryland Model, which will extend our efforts beyond hospitals to serve even more Marylanders,” said Maryland Department of Health Secretary Dennis Schrader.

The Maryland Model is an innovative Medicare per capita savings model that maintains financial stability in rural hospitals and provides opportunities for health care providers to transform care delivery model by improving health and quality. The continuing negotiations will incorporate the latest directions received from stakeholders in the hospitals, physicians, insurance, and patient sectors, as well as from federal policymakers. Building on the state’s track record of innovation in the health care sector, the model is designed to coordinate medical treatment for patients served in both hospital and non-hospital settings, to improve health outcomes, and to rein in the growth of health care costs.

The model limits cost shifting by various health care payers, including Medicare, and protects the individual consumer. It also addresses primary care and allows for greater coordination among the medical community. The model also enables the state and provider communities to collaborate on critical health care issues, including opioid use, diabetes, hypertension, and other chronic conditions. This collaborative approach draws upon a strong partnership with key players in Maryland’s health system – hospitals, payers, physicians, long-term care providers, and regulatory agencies, along with state and federal partners.

The Hogan administration is proactively working with stakeholders to finalize the updated model contract as quickly as possible with common priorities which include further discussions of the Maryland Model, including the Maryland Primary Care Program, and additional updates to the Care Redesign Participation Agreement, including efforts to obtain MACRA eligibility for Care Redesign Program participants.

Additional details on the proposed structure of the new model, including the process and timeline of negotiations with the federal government, can be found at http://hscrc.maryland.gov/Pages/progression.aspx.

Any additional questions or clarification can be directed via email to [email protected]. Implementation of the model will begin on January 1, 2019, pending final approval from the federal government.

About Maryland’s All-Payer Medicare Model

Maryland’s current approach to hospital payment is known as the “Maryland All-Payer Medicare Model Contract,” and runs from January 1, 2014, through December 31, 2018.  The All-Payer Model’s success metrics are based on enhancing quality, improving health outcomes, and constraining the growth of Medicare costs for hospital inpatient and outpatient services.

Since 2014, Maryland’s hospitals have successfully reduced unnecessary readmissions and hospital-acquired conditions, while decreasing the growth in hospital cost per capita. However, the current approach focused on hospitals does not sufficiently provide for comprehensive coordination across the entire health care system. Because of this limitation, the federal government required Maryland to develop a new model that encompasses all of the health care that patients receive, both inside the hospital and the community.